Net Metering Raises Inequity Concerns Amid Solar Transition

Net Metering Raises Inequity Concerns Amid Solar Transition

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Many Americans like to say that “if you work hard, you’ll get ahead,” but fewer and fewer of us actually think so.  A recent poll found that only 42 percent of our fellow Americans agree with that statement, down from 53 percent just two years ago.  For the African American community, it’s not hard to understand the disillusionment.  The median household income for African Americans is just over $35,000, compared to nearly $60,000 for white Americans.  Increasing costs of basic needs such as food, shelter, and energy certainly do not help.  It is a little-known fact that racial minorities in this country spend a significant amount of their incomes on energy needs.

We know that a big part of our energy future will likely be renewable sources of energy, which have the potential to change our communities and lives for the better.  Currently, however, the path towards increased renewables, specifically for rooftop solar, will remain flawed if certain bad policies such as net metering do not change.  Indeed, net metering is a widespread policy that is lurking in the background in many areas of the U.S. and is costing our community real money.  Many advocates of rooftop solar are quick to disparage those who criticize this policy, but a fact-based look at net metering shows that it is having a negative impact on African Americans.

This is because net metering allows wealthy Americans with solar panels on their roofs to pass off energy costs to those who are less fortunate – including lower-income Americans and apartment dwellers.  This cost shift occurs when customers with solar panels are allowed to run back their meter to the tune of the full retail price of the extra electricity they produce when the sun is shining.  They still need the power grid – both to sell this extra power and to get power from the utility company when they do not produce enough – but these generous credits mean they are not really paying their fair share of maintaining the grid.

So who is making up the difference?  Americans without rooftop solar panels, particularly millions of low-income customers who are disproportionately people of color.  If you live in an apartment, you do not even have the option of taking advantage of net metering.  With black homeownership running at 43.5 percent (compared to 72.9 percent for whites), it’s not hard to see who is being left out.  This situation is nothing if not problematic.

It is amazing to think that such an outdated and unnecessary policy could exist in America today.  While it was first intended to foster the fledgling rooftop solar industry, it is now being used as a tool to pad the pockets of rich solar company executives and their Wall Street bankers.  It is not surprising when you consider that these yearly subsidies can reach nearly $25,000 for a 4 kW rooftop solar system in California, according to a recent report by the Institute for Electric Innovation.

The spread of renewable energy sources like rooftop solar is a good thing for all Americans.  But as we ride the wave of these new technologies, we need to beware of the dangers lurking beneath the surface.  The economic growth and mobility of African Americans should not be collateral damage in this energy transition.

Matthew C. Whitaker is ASU Foundation professor of history and Founding Director of the Center for the Study of Race and Democracy, in the College of Letters and Sciences, at Arizona State University. He is also the owner and CEO of The Whitaker Group, L.L.C., an equity and inclusion, cultural competency, and human relations consulting firm. He can be followed on Twitter at @Dr_Whitaker.  The views and opinions expressed by the author are his own and do not necessarily reflect the views, opinions, and official policies of Arizona State University.

12 COMMENTS

  1. All my life my utility has been saying to “give your appliances the afternoon off” and then you produce a few kWh during peak demand and suddenly the utility cries foul and deals us some racial bias nonsense.

    Solar is available to all with zero down so give us a break.

    If the utility wanted to equalize things there should be a minimum charge based on original breaker supplying the home. Those in apartments would pay less with a 60 amp vs the large homeowner with 200+ amps. Business could pay similar.

  2. Whitaker is a known plagiarizer as any search of the web will show, regularly publishing work he has taken from other historians. Moreover, he has sold himself to the utility company, Arizona Public Service, posting pictures of he and his APS friends enjoying themselves in box seats at football games. APS recently wrote letters for Arizona politicians protesting solar power, and you can be sure they wrote Whitaker’s for him.

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